Disease outbreaks and a generally more health-conscious public caused consumption to drop
Los Angeles, CA (PRWEB) March 06, 2012
Though it has grown at an estimated average rate of 2.4% per year during the five years to 2012, the Meat, Beef and Poultry Processing industry has had its share of setbacks. First, meat consumption has fallen in line with higher prices across the cutting board. According to IBISWorld industry analyst Josh McBee, “The recession has exacerbated consumption declines, with consumers scaling back the quality of meat purchased in light of reduced disposable incomes and low sentiment toward the economy in general. Also, changing attitudes toward the health effects associated with red meat consumption have driven some consumers toward alternative protein sources.” In addition to broad trends related to consumer preferences and disposable income, disease outbreaks have limited industry growth. In 2009, swine flu briefly put the domestic pork market on ice, despite cooked pork products being deemed safe to eat and the disease affecting only human immune systems. The scare added to already low consumer sentiment and pushed pork volumes down that year. Likewise, an outbreak of bird flu in 2006 limited domestic poultry consumption that year. McBee adds that despite these detriments, meat remains a staple product, so overall meat sales are largely unaffected by greater economic issues.
Key downstream markets in wholesaling, frozen foods and animal food production have exhibited growth since 2006. Meanwhile, competition from substitute seafood products has been minimized thanks to seafood's high price growth and consumers' reluctance to spend on relatively extravagant meals. Returning purchasing power is expected to bolster the Meat, Beef and Poultry Processing industry's revenue further through 2012, with a 1.4% increase bringing total sales to an estimated $179.4 billion. Despite the stable nature of processor demand for raw animal inputs, unpredictable weather conditions and disease outbreaks can cause volatility from year to year. For example, a sudden drought in the Midwest, Plains or Rocky Mountains could hurt meat supplies through a reduction in livestock numbers and subsequent increase in meat prices. Also, a single case of livestock infection could result in substantial short-term losses and international trade bans for the affected meat. To combat such volatility, the industry has developed technologies aimed at reducing disease outbreaks. As a result of slowly recovering consumer sentiment, IBISWorld forecasts meat processing revenue to grow over the next five years.
The industry has a medium concentration of ownership. The top four companies in this industry include Tyson Foods Inc, JBS SA, Cargill Inc. and Smithfield Foods Inc. Acquisitions by the larger industry operators have increased concentration during the past five years. This trend is projected to continue due to profitability pressures. Key players will concentrate on core business development to achieve optimal economies of scale. For more information, visit IBISWorld’s Meat, Beef & Poultry Processing in the US industry page.
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IBISWorld industry Report Key Topics
This industry slaughters animals, processes the carcasses and packages the meat into products and by-products. The industry also purifies and refines animal fat, bones and meat scraps. Products are sold to other food manufacturers, renderers, grocery and meat wholesalers and retail traders. Establishments that mainly cut and pack meats (i.e. boxed meats) from purchased carcasses are also included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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